Author: Aymeric Halvarsson
Most construction material suppliers think they have a clear handle on their costs.
But in reality, hidden losses from outdated pricing, internal underbidding, and slow approvals quietly drain hundreds of thousands in profit every year from their business.
In this article, we’ll break down where these hidden costs live, why they’re so easy to overlook, and how you can finally get control before they eat away your margins. But first, let’s start with understanding what cost management means for material suppliers.
What does cost management mean for material suppliers?
At its core, cost management is about knowing exactly what it takes to deliver a job profitably. For construction material suppliers, that means tracking every element of your cost structure—materials, fuel, trucking, plant overhead, and your target margins.
But keeping track of everything isn’t easy.
Unlike many industries, pricing in the building material supplier industry can swing dramatically from week to week as it depends on too many variables, like fuel surcharge and raw materials. Regional delivery zones and plant-level variations make things even more complex.
For example, a surcharge buried in a delivery fee or the cost of shipping from a plant that’s unexpectedly at capacity can quickly turn a profitable job into a money-loser.
As one of our experts, Matt Jetmore puts it:
“One of the big things that people don’t realize is when you don’t have good visibility, you end up quoting as if you’re always shipping from the closest plant. But sometimes you’re at capacity, and you have to ship from a plant that’s 40 miles away, and nobody updates that cost. So you’re immediately upside down on the job.”
This is why clear, real-time cost visibility is crucial for building and construction material suppliers.
Let’s look closer at how these hidden costs quietly erode profit, before we explain how you can get better visibility.
5 ways not understanding your costs as a supplier erodes profit
You may feel confident in your pricing process. But if you’re relying on outdated tools or incomplete data, these five issues are likely impacting your bottom line.
1. Outdated and static pricing
Many suppliers still depend on static spreadsheets or monthly price sheets to guide quoting. These documents can’t keep pace with fast-moving changes in cement, diesel, and additive prices.
When costs rise in the weeks between updates, you end up locked into delivering materials at a loss.
Consider this scenario: a sales rep prepares a quote on May 1 using cement priced at $120 per ton. By May 15, the price jumps to $130—but no one updates the quote. The customer accepts, and just like that, your margin evaporates.
When this happens repeatedly, underquoting chips away at profit, one job at a time.
2. Internal undercutting
Without shared visibility into live quotes, sales teams often undercut each other without even realizing it. One rep hears a competitor offered a better price and lowers their quote to stay in the running. Another rep does the same.
Here’s how this plays out.
Imagine Rep A quotes $100 per yard. Rep B, unaware, offers $95 to the same customer. The customer uses this as leverage to negotiate down to $92.
Over time, this race to the bottom drags your average selling price below target margins, shrinking profits across the board.
And it doesn’t end there—lack of visibility keeps adding up and reducing your profit margins.
3. No real-time margin visibility
When you don’t have tools that show current costs and margins in real time, your teams are left guessing or relying on outdated reports.
Finance teams often discover margin erosion months later, when it’s too late to respond.
Picture this: at the end of the year, your finance team reviews performance and sees fuel surcharges quietly cut margins by 10%. They trace it back to jobs where freight and fuel escalators were not updated in the quoting system, causing each order to go out with underestimated costs.
No one flagged it in time to adjust pricing, and that lost profit could have been prevented easily with live margin tracking.
4. No forecasting or demand planning
Many suppliers operate reactively, quoting without analyzing bid trends or seasonal patterns. Without forecasting, you can’t anticipate price spikes, plan inventory, or adjust quotes proactively.
Consider a surge in summer demand. Without forecasting, your team scrambles to cover orders, incurring rush fees and delays. Quotes go out late, and pricing suffers.
This ultimately results in missed revenue and lost trust with customers who expect reliable, timely service.
And even if you manage to quote accurately, there’s one more obstacle that most teams overlook.
5. Delayed quote reviews and approvals
When there’s no structured process for fast reviews, quotes linger in inboxes while material costs change.
Imagine drafting a quote on Monday that sits in review for ten days. During that time, aggregate costs jump 8%. The customer signs the outdated quote, and you’re locked into the lower price.
Now imagine this happening multiple times a year, simply because you don’t have the right system in place to streamline approvals.
Here’s how Matt Jetmore explains this lack of visibility:
“Most people think they’re pricing fine, but they don’t see that if you’re quoting 600,000 yards a year, even a dime off per yard adds up to $60,000. It’s death by a thousand cuts.”
So what can you do to finally get control of your pricing and improve your margins?
How to build cost visibility into your daily operations?
To protect your margins, you need a few core capabilities working together every day.
- Live pricing feeds: Ensure every quote reflects up-to-date material, fuel, and delivery costs—not last month’s estimates. This also helps your sales team respond faster to market fluctuations and avoid quoting errors that cut into margins.
- Margin thresholds and approvals: Set clear minimum margins so low-profit quotes get flagged before they’re sent. With automated approvals, you can keep deals moving without sacrificing profitability.
- Forecasting and demand planning: Use historical trends to anticipate busy seasons and adjust pricing and resources early. This forward-looking view helps you avoid last-minute rush charges and stockouts.
- Integrated workflows: Connect quoting, dispatch, and billing so no data slips through the cracks. When these processes are linked, you reduce manual entry and errors that cost money.
- Clear reporting and analytics: Track which products, customers, and regions drive profit—and which ones quietly drain it. Over time, this data empowers you to refine strategy and focus on your most valuable work.
Read our detailed blog on how to increase profit margins for more information.
But before you move ahead with applying these strategies, it’s important to first check how much margin you may already be losing. This will give you a clear baseline and help you prioritize your next steps effectively.
Check how much margin you’re losing due to a lack of visibility
Every outdated quote, slow approval, or hidden surcharge doesn’t just cost you cents; it quietly adds up to thousands or even millions a year.
If you don’t have the right systems in place, you simply can’t see what you’re losing.
That’s where Sabstack helps you uncover and recover lost profit by:
- Tracking real-time costs and enforcing pricing rules
- Speeding up quote approvals
- Forecasting demand accurately so you can plan ahead
- Avoiding quoting errors that drain profit
Speak with one of our experts today to see how much margin you could be saving—and what’s slipping through the cracks.
By understanding the hidden costs and inefficiencies unique to your business, you can build a plan that not only recovers lost profit but also prevents future leaks before they start.
Book your cost analysis session